Trading At A 25% Discount

Black Diamond Inc (NASDAQ:BDE) sells premium quality apparel to climbing, mountaineering, backpacking, and skiing enthusiasts. Gearing marketing towards a more general outdoor consumer could send sales soaring as the brand is currently very well recognized for quality and innovation. Key retail partners include REI, Mountain Equipment Co-op, Backcountry.com, Au Vieux Campeur, Globetrotter, Sport Shuster, and Bachli Bergsport (source: latest 10-K). In 2016, REI which is the nation’s largest consumer cooperative with 5 million members, accounted for 16% of net sales.

The competitive advantages of Black Diamond Equipment and PIEPS (the two brands under this company) are the fact that many employees are high-level performance athletes in these sports themselves who test and refine new products.

Sales which are roughly 51% domestic and 49% international are generated through three primary categories: Climb (34% of sales), Ski (23% of sales), and Mountain (43% of sales). In the mountain category, roughly 15% of sales is lighting. Approximately 20 – 25% of products are manufactured in-house.

The marketing and sales growth strategy could use improvement. Our take is that these quality products have not reached their full potential and more needs to be done on this front. If you are reading and haven’t heard of this company or their products, that’s a further testament to this statement. From an investor’s perspective, this can be an intriguing time to get in before wall street is fully aware of the company’s offerings. The online presence has been growing as the last year has generated a 20% increase in Facebook “Likes” to 300,000 and an 118% increase in Instagram followers to 386,000. This has contributed to the online business year-over-year growth of 24%.